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Accounting Policies of ICDS Ltd. Company
Mar 31, 2025
1 Company Overview and Material Accounting Policies:1.1 Company overview
ICDS Limited ( âthe Companyâ) is incorporated on October 21, 1971 and was registered as a Non Banking Financial Company (NBFC). The Company had filed the Scheme of Arrangement during August 2002, and stopped its fund based business and surrendered its certificate of registration as Non Banking Finance Company to RBI. The Company is presently concentrating on the recovery of its dues and repaying its liabilities and is also engaged in trading activities of shares and securities, rental revenue from investment properties, marketing of the insurance products of life and general insurance companies. The Company is diversifying into more fee based activities.
Information on other related party relationship of the Company is provided in Note No. 33.
The Standalone Ind AS financial statements of the Company for the year ended March 31, 2025 were authorised for issue in accordance with a resolution of the directors on May 27, 2025.
1.2 Basis of preparation of financial statements
The Standalone financial statements are prepared in accordance with Indian Accounting Standards (Ind AS), under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values (refer accounting policy regarding financial instruments). The Ind AS are prescribed under section 133 of the Companies Act, 2013 (the âActâ) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. These financial statements are called Standalone Ind AS financial statements.
The standalone Ind AS financial statements are presented in âIndian Rupeesâ (INR) which is also the Companyâs functional currency and all values are disclosed to the nearest Thousands with no decimals (INR 000), except when otherwise indicated.
1.3 Material accounting policiesa. Use of estimates
The preparation of standalone financial statements in conformity with IND AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the managementâs best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
b. Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
a) Expected to be realised or intended to be sold or consumed in normal operating cycle
b) Held primarily for the purpose of trading
c) Expected to be realised within twelve months after the reporting period, or
d) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is treated as current when:
a) It is expected to be settled in normal operating cycle
b) It is held primarily for the purpose of trading
c) It is due to be settled within twelve months after the reporting period, or
d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
i. The Company derives its revenues, mainly from recovery of its dues which was written off /provided during earlier years and is also engaged in trading activities of shares and securities, rental revenue from investment properties and marketing of the insurance products of life and general insurance companies. Brokerage/commission received from insurance agency services has been accounted on accrual basis on certainty of realisation.
Rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease.
Revenue is measured based on the consideration that is specified in a contract with a customer or is expected to be received in exchange for the products or services and excludes amounts collected on behalf of third parties. Revenue is recognized upon transfer of control of promised products or services to customers. To recognize revenues, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied.
The revenue is recognised when (or as) the performance obligation is satisfied, which typically occurs when (or as) control over the products or services is transferred to a customer.
Revenue from insurance agency services where the Company is entitled only to brokerage/commission is recognised to the extent of brokerage/commission received where the risk and rewards of the transaction lies with the principal.
Any claims, which the Company is entitled, are recognised on reasonable certainty to expect ultimate collection and on acceptance by the third party.
ii. Interest and other income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assetâs net carrying amount on initial recognition.
iii. Dividend income is accounted for in the year in which the right to receive the same is established by the reporting date.
iv. Contract Balancesa. Contract Assets
A Contract Asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
A receivable represents the Companyâs right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
A Contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
d. Property, Plant & Equipments:
Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items such as purchase price, freight, duties, levies. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs if the recognition criteria are met.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate assets are derecognised when replaced. All other repairs and maintenance are charged to profit and loss during the reporting period in which they are incurred.
Recognition:
The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if:
a) it is probable that future economic benefits associated with the item will flow to the entity; and
b) the cost of the item can be measured reliably.
The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset having useful life that is materially different from that of the remaining asset. These components are depreciated over their useful lives; the remaining asset is depreciated over the life of the principal asset.
Depreciation
Depreciation on property, plant and equipments are provided on the Straight Line Method over the useful lives of the assets which is equal to those specified under Schedule II to the Companies Act, 2013, which is as follows:
|
Asset Category |
Useful Life in Years |
|
Plant & Machinery |
5 |
|
Electrical Fittings |
10 |
|
Furniture & Fittings |
10 |
|
Office Equipments |
5 to 10 years |
|
Vehicles |
8 |
|
Computers |
3 |
Further, the management has estimated the useful lives of asset individually costing '' 5,000 or less to be less than one year, whichever is lower than those indicated in Schedule II. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Property that is held for long-term rental yields or for capital appreciations or both, and that is not occupied by the company, is classified as Investment property. Investment property is measured initially at its cost, including the related transaction cost and where applicable borrowing costs.
Subsequent expenditure is capitalised to the assets carrying amount only when it is probable that future economic benefit associated with the expenditure flow to the Company and the cost of the same can be measured reliably. All other repairs and maintenance cost are expensed when incurred. When part of an investment property is replaced, the carrying amount of replaced property is derecognised.
Investment properties are depreciated using the straight line method over their estimated useful lives. Investment properties generally have useful life of 60 years. The useful life has been determined based on the technical evaluation performed by the managementâs expert.
f. Investments in subsidiaries
Investment in subsidiaries are stated at cost as per Ind AS 27, âSeparate Financial Statementsâ. Where the carrying amount of an investment is greater than its estimated recoverable amount it is assessed for recoverability and in case of permanent diminution, provision for impairment is recorded in statement of profit and loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged to the Statement of Profit and loss.
The Company as a lessee
The Companyâs lease asset classes primarily consist of leases for buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether :
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date (i.e., difference between present value and value of interest free security deposit paid) of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other
assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases (i.e., India). Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option.
Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
The Company as a lessor
Effective April 01, 2019, the Company has adopted Ind AS 116 âLeasesâ and applied the standard to all lease contracts existing on April 01, 2019 using the retrospective with cumulative effect method of initially applying the standard recognised at the date of initial application without any adjustment to opening balance of retained earnings. The Company did not have any material impact on the financial statements on application of the above standard.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The sublease is classified as a finance or operating lease by reference to the ROU asset arising from the head lease.
For operating leases, rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Companyâs expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.
i. Impairment of non-financial assets
Property, plant and equipment and investment property are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognised in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount.
The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognised for the asset in prior years.
j. Provisions and Contingent Liabilities
A provision is recognised if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle the present obligation at the reporting date. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre -tax rate that reflects current market assessments of the time value of money and the risk specific to the liability. The unwinding of discount is recognised as finance cost. Expected future operating losses are not provided for.
A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably.
Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed except when realisation of income is virtually certain, related asset is disclosed.
Provisions and contingent liability are reviewed at each balance sheet.
i) Defined benefit plans
The Companyâs gratuity plan is a defined benefit plan. The present value of gratuity obligation under such defined benefit plans is determined based on actuarial valuations carried out by an independent actuary using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations.
Actuarial gains or losses are recognised in other comprehensive income. Further, the profit or loss does not include an expected return on plan assets. Instead net interest recognised in profit or loss is calculated by applying the discount rate used to measure the defined benefit obligation to the net defined benefit liability or asset. The actual return on the plan assets above or below the discount rate is recognised as part of remeasurements of the net defined liability or asset through other comprehensive income.
Remeasurement of the net defined liability or asset (excluding amounts included in net interest on the net defined benefit liability) are not reclassified to profit or loss in subsequent periods.
A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee Provident Fund and Employee State Insurance to Government administered Provident Fund Scheme and Employee State Insurance Scheme which is a defined contribution plan. The Companyâs contribution is recognised as an expense in the statement of profit and loss during the period in which the employee renders the related service.
iii) Short-term employee benefits
All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc., are recognised in the statement of profit and loss in the period in which the employee renders the related service.
Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognizes cost for restructuring. If the benefits are not expected to be settled wholly within 12 months of reporting date, then they are discounted.
Financial assets and financial liabilities are recognised when the Company becomes a party to the contract embodying the related financial instruments. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss (âFVTPLâ)) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit and loss are immediately recognised in the statement of profit and loss.
Investment in equity instruments issued by subsidiaries, associates and joint ventures are measured at cost less impairment.
The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.
i) Financial Assets
Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets measured at fair value
Financial assets are measured at fair value through other comprehensive income (âFVTOCIâ) if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial asset not measured at amortised cost or at fair value through other comprehensive income is carried at fair value through the statement of profit and loss.
For financial assets maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the shorter maturity of these instruments.
Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, trade receivables and other contractual rights to receive cash or other financial asset.
Expected credit loss (ECL) : In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss. The Company follows âsimplified approachâ for recognition of impairment loss allowance on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the Company reverts to recognizing impairment loss allowance based on 12 month ECL.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward looking information.
Derecognition of financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another party and the transfer qualifies for de-recognition under Ind AS 109.
If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the assets and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On de-recognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of de-recognition and the consideration received is recognised in statement of profit or loss.
ii) Financial liabilities and Equity InstrumentsClassification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant. Interest bearing loans are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.
For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Financial liabilities at FVTPL
A financial liability may be designated as at FVTPL upon initial recognition if:
⢠such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
⢠the financial liability whose performance is evaluated on a fair value basis, in accordance with the Companyâs documented risk management;
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.
Fair values are determined in the manner described in note no. 26 Financial liabilities at amortised cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is included in the âFinance costsâ line item.
Loans and borrowings : After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. This category generally applies to borrowings.
Derecognition of Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
a) In the principal market for the asset or liability, or
b) In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 - valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 - valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Companyâs management determines the policies and procedures for both recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value, and for non-recurring measurement, such as assets held for distribution in discontinued operations.
At each reporting date, the management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Companyâs accounting policies. For this analysis, the management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.
The management, in conjunction with the Companyâs external valuers, also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
o. Taxes on income Current income tax
Tax expense comprises current and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Companyâs liability for current tax is calculated using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying values of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of the taxable profit and is accounted for using the balance sheet liability model. Deferred tax liabilities are generally recognised for all the taxable temporary differences. In contrast, deferred assets are only recognised to the extent that is probable that future taxable profits will be available against which the temporary differences can be utilised.
Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Basic earnings per equity share are computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. The company does not have potential dilutive equity shares outstanding during the period.
1.4 Significant accounting judgements, estimates and assumptions
The preparation of the Companyâs financial statements requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosures of contingent liabilities. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The estimate and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which are estimate is revised and future periods affected.
A) Critical Accounting Estimates and Assumptions :
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
The Companyâs tax jurisdiction is India. Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid / recovered for uncertain tax positions.
Deferred Tax Assets is recognised to the extent that it is probable that taxable profit will be available against which the same can be utilised. In assessing the probability, the Company considers whether the entity has sufficient taxable temporary differences, which will result in taxable amounts against which the unused tax losses or unused tax credits can be utilised before they expire. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies, including estimates of temporary differences reversing on account of available benefits from the Income Tax Act, 1961. Deferred tax assets recognised to the extent of the corresponding deferred tax liability. Also Refer Note No. 13.
ii) Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured at Discounted cash flows where available or face value when it closely approximates the fair value where reliable financial and other information available and all other cases measured at nominal value. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk, volatility and inputs on average borrowing rate applicable to company. Refer Note No. 26 and 27.
Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal and contractual claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events. Refer Note No. 30.
iv) Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds.
The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at the interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates in India.
Further details about gratuity obligations are given in note no. 32(b)
B) Significant judgementsi) Property Plant and Equipment and Investment properties
Property, plant and equipment and Investment properties represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of companyâs assets are determined by management at the time the asset is acquired/ constructed and reviewed periodically, including at each financial year end. The lives are based on the technical assessment which has relied on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence and Government Policies impacting the assets use.
ii) Valuation of Investment Property
Investment Property is stated at Cost. However, as per Ind AS 40 there is a requirement to disclose fair value as at the Balance sheet date. The Company has engaged independent valuation specialists to determine the fair value of its investment property as at reporting date. The best evidence of fair value as per the valuation specialist is current prices in active markets for similar properties considering the location, type of construction, specification of building materials used, making enquiries in the vicinity and keeping in view the downward trend in real estate prices which has been considered for the purpose of above valuation.
iii) Evaluation of indicators of impairment of assets
The assessment of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.
iv) Fair value measurement of financial instruments
The fair value of unquoted financial instruments are measured at the value in which it is being transacted in the unquoted market as per the reliable financial and other information is available with the management. All other cases fair value is taken at nominal value.
v) Taxes
Deferred tax assets recognised to the extent of the corresponding deferred tax liability on remeasurement of net defined benefit plans. (refer note no. 13.04).
1.5 Introduction of new standards and amendments to existing standards issued but not effective
Ministry of Corporate Affairs (âMCAâ) has not notified any new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules.
Mar 31, 2024
1.3 Material accounting policies
a. Use of estimates
The preparation of standalone financial statements in conformity with IND AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the managementâs best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
b. Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
a) Expected to be realised or intended to be sold or consumed in normal operating cycle
b) Held primarily for the purpose of trading
c) Expected to be realised within twelve months after the reporting period, or
d) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is treated as current when:
a) It is expected to be settled in normal operating cycle
b) It is held primarily for the purpose of trading
c) It is due to be settled within twelve months after the reporting period, or
d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting Deriod.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
c. Revenue Recognition:
i. The Company derives its revenues, mainly from recovery of its dues which was written off /provided during earlier years and is also engaged in trading activities of shares and securities, rental revenue from investment properties and marketing of the insurance products of life and general insurance companies.
Brokerage/commission received from insurance agency services has been accounted on accrual basis on certainty of realisation.
Rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease.
Revenue is measured based on the consideration that is specified in a contract with a customer or is expected to be received in exchange for the products or services and excludes amounts collected on behalf of third parties. Revenue is recognized upon transfer of control of promised products or services to customers. To recognize revenues, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied.
The revenue is recognised when (or as) the performance obligation is satisfied, which typically occurs when (or as) control over the products or services is transferred to a customer.
Revenue from insurance agency services where the Company is entitled only to brokerage/commission is recognised to the extent of brokerage/commission received where the risk and rewards of the transaction lies with the principal.
Any claims, which the Company is entitled, are recognised on reasonable certainty to expect ultimate collection and on acceptance by the third party.
ii. Interest and other income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assetâs net carrying amount on initial recognition.
iii. Dividend income is accounted for in the year in which the right to receive the same is established by the reporting date.
iv. Contract Balances
a. Contract Assets
A Contract Asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
b. Trade Receivables
A receivable represents the Companyâs right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
c. Contract Liabilities
A Contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
d. Property, Plant & Equipments:
Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items such as purchase price, freight, duties, levies. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs if the recognition criteria are met.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate assets are derecognised when replaced. All other repairs and maintenance are charged to profit and loss during the reporting period in which they are incurred.
Recognition:
The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if:
a) it is probable that future economic benefits associated with the item will flow to the entity; and
b) the cost of the item can be measured reliably.
The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset having useful life that is materially different from that of the remaining asset. These components are depreciated over their useful lives; the remaining asset is depreciated over the life of the principal asset.
Depreciation
Depreciation on property, plant and equipments are provided on the Straight Line Method over the useful lives of the assets which is equal to those specified under Schedule II to the Companies Act, 2013, which is as follows:
Further, the management has estimated the useful lives of asset individually costing Rs 5,000 or less to be less than one year, whichever is lower than those indicated in Schedule II. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
e. Investment properties:
Property that is held for long-term rental yields or for capital appreciations or both, and that is not occupied by the company, is classified as Investment property. Investment property is measured initially at its cost, including the related transaction cost and where applicable borrowing costs.
Subsequent expenditure is capitalised to the assets carrying amount only when it is probable that future economic benefit associated with the expenditure flow to the Company and the cost of the same can be measured reliably. All other repairs and maintenance cost are expensed when incurred. When part of an investment property is replaced, the carrying amount of replaced property is derecognised.
Investment properties are depreciated using the straight line method over their estimated useful lives. Investment properties generally have useful life of 60 years. The useful life has been determined based on the technical evaluation performed by the managementâs expert.
f. Investments in subsidiaries:
Investment in subsidiaries are stated at cost as per Ind AS 27, âSeparate Financial Statementsâ. Where the carrying amount of an investment is greater than its estimated recoverable amount it is assessed for recoverability and in case of permanent diminution, provision for impairment is recorded in statement of profit and loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged to the Statement of Profit and loss.
g. Leases
The Company as a lessee
The Companyâs lease asset classes primarily consist of leases for buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether :
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date (i.e., difference between present value and value of interest free security deposit paid) of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The
lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases (i.e India). Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option.
Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
h. Leases
The Company as a lessor
Effective April 01,2019, the Company has adopted Ind AS 116 âLeasesâ and applied the standard to all lease contracts existing on April 01, 2019 using the retrospective with cumulative effect method of initially applying the standard recognised at the date of initial application without any adjustment to opening balance of retained earnings. The Company did not have any material impact on the financial statements on application of the above standard.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The sublease is classified as a finance or operating lease by reference to the ROU asset arising from the head lease.
For operating leases, rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Companyâs expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.
i. Impairment of non-financial assets
Property, plant and equipment and investment property are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognised in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount.
The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognised for the asset in prior years.
Mar 31, 2014
1.01 Basis of preparation of financial statements
The financial statements are prepared under the historical cost
convention from the books of account maintained on accrual basis, in
conformity with accounting principles generally accepted in India, and
comply with the accounting standards issued by The Institute of
Chartered Accountants of India and Accounting Standard (Companies
Rules) 2006 and referred to in Section 211 (3C) of the Companies Act,
1956. All assets and liabilities have been classified as current or
nonÂcurrent as per the Company''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of service and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current and nonÂcurrent classification of
assets and liabilities.
1.02 Use of Estimates
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets, liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Difference
between the actual result and estimates are recognised in the period in
which the results are known/materialised.
1.03 System of Accounting and income recognition
a. The accounts are prepared under historical cost convention and all
significant items of Income & Expenditure are accounted on accrual
system of accounting.
b. The Company recognises income as prescribed by RBI guidelines on
Income Recognition.
c. i. Hire Purchase Income is accounted by sum of digits method to
provide a constant periodic rate of return on the net investment
outstanding in the contracts. ii. Lease Income is accounted on accrual
of lease rentals for the period. iii. Income from bills discounting
is accounted on due basis. iv. Brokerage/commission received on sale
of mobiles and accessories, insurance agency services has been
accounted on accrual basis on certainty of realisation. v. Sale of
Mobile and Accessories are recognised on accrual basis net of value
added tax. vi. Interest is recognized using the time proportion method
based on rates implicit in the transaction. vii. Dividend income is
accounted for in the year in which the right to receive the same is
established.
1.04 Tangible assets, intangible assets and Capital WorkÂinÂprogress
Fixed assets are stated at original cost/revalued cost less
depreciation after taking into consideration the Lease adjustment
account where necessary.
1.05 Depreciation/Amortisation
Depreciation is provided on straight line method at the rates and in
the manner specified in the Schedule XIV to the Companies Act, 1956.
Depreciation on revalued assets to the extent of revaluation is
transferred from Revaluation Reserve. Fixed Asset individually costing
less than Rs.5,000/Â are depreciated @ 100% in the year of acquisition.
1.06 Investments
a. Non current investments are valued at cost. Provision for
diminution in the value of investments is made to recognise decline,
other than temporary.
b. Investment in buildings that are not intended to be occupied
substantially for use by, or in the operations of, the Company, have
been classified as investment property. Investment properties are
carried at cost less accumulated depreciation.
c. Current Investments are stated at cost or market value whichever is
lower.
1.07 Inventories
a. Stock on hire is valued at agreement values net of recoveries.
b. Stock of shares and debentures are valued at lower of cost or net
realisable value.
c. Stock of Mobiles and Accessories are valued at lower of cost or net
realisable value.
1.08 Employee benefits
a. The Company''s Defined Contribution Plan to provident fund and
pension fund are made at pre determined rates to the recognised
Provident Fund and are charged to statement of Profit and loss.
b. Liability for Defined benefit Plan for Gratuity is provided on the
basis of valuations, as at the Balance Sheet date, carried out by Life
Insurance Corporation of India.
1.09 Borrowing cost
Borrowing costs that are directly attributable to the acquisition,
construction or production of an asset are capitalized as part of the
cost of that asset till the date of capitalization of qualifying asset.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
1.10 Taxes on Income
a. Tax expenses comprise both Current Tax and Deferred Tax at the
applicable enacted or substantively enacted rates. Current Tax
represents the amount of Income Tax payable/recoverable in respect of
the Taxable income/loss for the reporting period.
b. Deferred Tax represents the effect of timing difference between
Taxable income and accounting income for the reporting period that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred Tax Assets are recognized only if there is
virtual certainty of realization.
1.11 Earnings per share
The Basic Earnings per share is computed by dividing the net Profit
after tax for the period by the weighted average number of equity
shares outstanding at the end of the period. Diluted Earnings per
share, if any is computed using the weighted average number of equity
shares and dilutive potential equity share outstanding during the
period except when the results would be antiÂdilutive.
1.12 Impairment
At each Balance Sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that those
assets suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the
extent of impairment loss. Recoverable amount is the higher of an
asset''s net selling price and value in use. In assessing value in use,
the estimated future cash flows expected from the continuing use of the
asset and from its disposal are discounted to their present value using
a preÂdiscount rate that refects the current market assessments of time
value of money and the risks Specific to the asset. Reversal of
impairment loss is recognised immediately as income in the statement of
Profit and loss.
1.13 Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when the Company has a present obligation as
a result of a past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions, other than employee benefits,
are not discounted to their present value and are determined based on
management estimate required to settle the obligation at the Balance
Sheet date. These are reviewed at each Balance Sheet date and adjusted
to refect the current management estimates. A disclosure for a
contingent liability is made when there is a possible obligation or a
present obligation that may, but probably will not, require an outflow
of resources. Where there is a possible obligation or a present
obligation that the likelihood of outflow of resources is remote, no
provision or disclosure is made. Contingent Assets are neither
recognised nor disclosed in the financial statements.
Mar 31, 2013
1.01 Basis of preparation of financial statements
The financial statements are prepared under the historical cost
convention from the books of account maintained on accrual basis, in
conformity with accounting principles generally accepted in India, and
comply with the accounting standards issued by The Institute of
Chartered Accountants of India and Accounting Standard (Companies
Rules) 2006 and referred to in Section 211 (3C) of the Companies Act,
1956.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of service and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current and non-current classification of
assets and liabilities.
1.02 Use of Estimates
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets, liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Difference
between the actual result and estimates are recognised in the period in
which the results are known / materialised.
1.03 System of Accounting and income recognition
a) The accounts are prepared under historical cost convention and all
significant items of Income & Expenditure are accounted on accrual
system of accounting.
b) The company recognises income as prescribed by RBI guidelines on
Income Recognition.
c) i) Hire Purchase Income is accounted by sum of digits method to
provide a constant periodic rate of return on the net investment
outstanding in the contracts.
ii) Lease Income is accounted on accrual of lease rentals for the
period. Hi) Income from bills discounting is accounted on due basis.
iv) Brokerage/commission received on sale of mobiles and accessories,
insurance agency services has been accounted on accrual basis on
certainty of realisation.
v) Sale of Mobile and Accessories are recognised on accrual basis net
of value added tax.
vi) Interest is recognized using the time proportion method based on
rates implicit in the transaction.
vii) Dividend income is accounted for in the year in which the right to
receive the same is established.
1.04 Tangible assets, intangible assets and Capital Work-in-progress
Fixed assets are stated at original cost/revalued cost less
depreciation after taking into consideration the Lease adjustment
account where necessary.
1.05 Depreciation / Amortisation
Depreciation is provided on straight line method at the rates and in
the manner specified in the Schedule XIV to the Companies Act, 1956.
Depreciation on revalued assets to the extent of revaluation is
transferred from Revaluation Reserve. Fixed Asset individually costing
less than Rs.5,000/- are depreciated @ 100% in the year of acquisition.
1.06 Investments
a) Non current investments are valued at cost. Provision for diminution
in the value of investments is made to recognise decline, other than
temporary.
b) Investment in buildings that are not intended to be occupied
substantially for use by, or in the operations of, the Company, have
been classified as investment property. Investment properties are
carried at cost less accumulated depreciation.
c) Current Investments are stated at cost or market value whichever is
lower.
1.07 Inventories
a) Stock on hire is valued at agreement values net of recoveries.
b) Stock of shares and debentures are valued at lower of cost or net
realisable value.
c) Stock of Mobiles and Accessories are valued at lower of cost or net
realisable value.
1.08 Employee Benefits
a) The Company''s Defined Contribution Plan to provident fund and
pension fund are made at pre- determined rates to the recognised
Provident Fund and are charged to statement of profit and loss.
b) Liability for Defined Benefit Plan for Gratuity is provided on the
basis of valuations, as at the Balance Sheet date, carried out by Life
Insurance Corporation of India.
1.09 Borrowing cost
Borrowing costs that are directly attributable to the acquisition,
construction or production of an asset are capitalized as part of the
cost of that asset till the date of capitalization of qualifying asset.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
1.10 Taxes on Income
a. Tax expenses comprise both Current Tax and Deferred Tax at the
applicable enacted or substantively enacted rates. Current Tax
represents the amount of Income Tax payable/recoverable in respect of
the Taxable income/loss for the reporting period.
b. Deferred Tax represents the effect of timing difference between
Taxable income and accounting income for the reporting period that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred Tax Assets are recognized only if there is
virtual certainty of realization.
1.11 Earnings per share
The Basic Earnings per share is computed by dividing the net profit
after tax for the period by the weighted average number of equity
shares outstanding at the end of the period. Diluted Earnings per
share, if any is computed using the weighted average number of equity
shares and dilutive potential equity share outstanding during the
period except when the results would be anti-dilutive.
1.12 Impairment
At each Balance Sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an assets net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a pre-discount rate that reflects the current
market assessments of time value of money and the risks specific to the
asset. Reversal of impairment loss is recognised immediately as income
in the statement of profit and loss.
1.13 Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when the Company has a present obligation as
a result of a past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions, other than employee
benefits, are not discounted to their present value and are determined
based on management estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current management estimates.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made. Contingent
Assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2012
1.01 Basis of preparation of financial statements
The financial statements are prepared under the historical cost
convention from the books of accounts maintained on accrual basis, in
conformity with accounting principles generally accepted in India, and
comply with the accounting standards issued by the council of the
Institute of Chartered Accountants of India and Accounting Standard
(Companies Rules) 2006 and referred to in Section 211 (3C) of the
Companies Act, 1956.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of service and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current and non-current classification of
assets and liabilities.
1.02 Use of Estimates
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets, liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Difference
between the actual result and estimates are recognised in the period in
which the results are known / materialised.
1.03 System of Accounting and income recognition
a) The accounts are prepared under historic cost convention and all
significant items of Income and Expenditure are accounted on accrual
system of accounting.
b) The company recognises income as prescribed by RBI guidelines on
Income Recognition
c) i) Hire Purchase Income is accounted by sum of digits method to
provide a constant periodic rate of return on the net investment
outstanding in the contracts.
ii) Lease Income is accounted on accrual of lease rentals for the
period.
iii) Income from bills discounting is accounted on due basis.
iv) Brokerage/commission received on insurance agency services has been
accounted on accrual basis on certainty of realisation.
1.04 Tangible assets, intangible assets and Capital Work-in-progress
Fixed assets are stated at original cost/revalued cost less
depreciation after taking into consideration the Lease adjustment
account where necessary.
1.05 Depreciation / Amortisation
Depreciation is provided on straight line method at the rates and in
the manner specified in the Schedule XIV to the Companies Act, 1956.
Depreciation on revalued assets to the extent of revaluation is
transferred from Revaluation Reserve.
Fixed Asset individually costing less than Rs.5,000/- are depreciated @
100% in the year of acquisition.
1.06 Investments
a) Non current investments are valued at cost. Provision for diminution
in the value of investments is made to recognise decline, other than
temporary.
b) Investment in buildings that are not intended to be occupied
substantially for use by, or in the operations of, the Company, have
been classified as investment property. Investment properties are
carried at cost less accumulated depreciation.
c) Current Investments are stated at cost or market value whichever is
lower.
1.07 Inventories
a) Stock on hire is valued at agreement values net of recoveries.
b) Stock of shares / debentures is valued at lower of cost or net
realisable value.
1.08 Employee Benefits
a) The Company's Defined Contribution Plan to provident fund and
pension fund are made at pre-determined rates to the recognised
Provident Fund and are charged to statement of profit and loss.
b) Liability for Defined Benefit Plan for Gratuity is provided on the
basis of valuations, as at the Balance Sheet date, carried out by Life
Insurance Corporation of India.
1.09 Borrowing cost
Borrowing costs that are directly attributable to the acquisition,
construction or production of an asset are capitalized as part of the
cost of that asset till the date of capitalization of qualifying asset.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
1.10 Taxes on Income
a) Tax expenses comprise both Current Tax and Deferred Tax at the
applicable enacted or substantively enacted rates. Current Tax
represents the amount of Income Tax payable/ recoverable in respect of
the Taxable income/loss for the reporting period.
b) Deferred Tax represents the effect of timing difference between
Taxable income and accounting income for the reporting period that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred Tax Assets are recognized only if there is
virtual certainty of realization.
1.11 Earnings per share
The Basic Earnings per share is computed by dividing the net profit
after tax for the period by the weighted average number of equity
shares outstanding at the end of the period. Diluted Earnings per
share, if any is computed using the weighted average number of equity
shares and dilutive potential equity share outstanding during the
period except when the results would be anti-dilutive.
1.12 Impairment
At each Balance Sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset's net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a pre-discount rate that reflects the current
market assessments of time value of money and the risks specific to the
asset. Reversal of impairment loss is recognised immediately as income
in the statement of profit and loss.
1.13 Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when the Company has a present obligation as
a result of a past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions, other than employee
benefits, are not discounted to their present value and are determined
based on management estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current management estimates.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made. Contingent
Assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2011
A. Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost
convention from the books of accounts maintained on accrual basis, in
conformity with accounting principles generally accepted in India, and
comply with the accounting standards issued by the council of the
Institute of Chartered Accountants of India and Accounting Standard
(Companies Rules) 2006 and referred to in Section 211 (3C) of the
Companies Act, 1956, (the Act).
B. Use of Estimates
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets, liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Difference
between the actual result and estimates are recognised in the period in
which the results are known / materialised.
C. System of Accounting and Income Recognition
1. The accounts are prepared under historic cost convention and all
significant items of Income and Expenditure are accounted on accrual
system of accounting.
2. The Company recognises income as prescribed by RBI guidelines on
Income Recognition.
3. i) Hire Purchase Income is accounted by sum of digits method to
provide a constant periodic rate of return on the net investment
outstanding in the contracts.
ii) Lease Income is accounted on accrual of lease rentals for the
period.
iii) Income from bills discounting is accounted on due basis.
iv) Brokerage/commission received on insurance agency services has been
accounted on accrual basis on certainity of realisation.
D. Fixed Assets
Fixed assets are stated at original cost/revalued cost less
depreciation after taking into consideration the Lease adjustment
account where necessary.
E. Depreciation
Depreciation is provided on straight line method at the rates and in
the manner specified in the Schedule XIV to the Companies Act, 1956.
Depreciation on revalued assets to the extent of revaluation is
transferred from Revaluation Reserve.
F. Investments
i) Long term investments are valued at cost. Provision for diminution
in the value of investments is made to recognise decline, other than
temporary.
ii) Current Investments are stated at cost or market value whichever is
lower.
G. Current Assets
i) Stock on hire is valued at agreement values net of recoveries.
ii) Stock of shares is valued at lower of cost or market price.
H. Employee Benefit
i) The Company's Defined Contribution Plan to provident fund are made
at pre-determined rates to the recognised Provident Fund and are
charged to Profit and Loss Account.
ii) Liability for Defined Benefit Plan for Gratuity is provided on the
basis of valuations, as at the Balance Sheet date, carried out by Life
Insurance Corporation of India.
I. Borrowing Costs
Borrowing costs are recognised as an expense in the year in which they
are incurred except which are directly attributable to
acquisition/construction of fixed asset, till the time such assets are
ready for use, in which case the borrowing costs are capitalised as
part of the cost of asset.
J. Taxes on Income
i) Tax expenses comprise both Current Tax and Deferred Tax at the
applicable enacted or substantively enacted rates. Current Tax
represents the amount of Income Tax payable/recoverable in respect of
the Taxable income/loss for the reporting period. Deferred Tax
represents the effect of timing difference between Taxable income and
accounting income for the reporting period that originate in one period
and are capable of reversal in one or more subsequent periods. Deferred
Tax Assets are recognized only if there is virtual certainty of
realization.
ii) Fringe Benefit Tax was being provided in accordance with provisions
of Section 11 SWA of the Income Tax Act, 1961 as expenditure for the
period.
K. Earnings per Share
The Basic Earnings per Share is computed by dividing the net profit
after tax for the period by the weighted average number of equity
shares outstanding during the period. Diluted Earnings per share, if
any is computed using the weighted average number of equity shares and
dilutive potential equity share outstanding during the period except
when the results would be anti-dilutive.
L. Impairment
At each Balance Sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset's net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a pre-discount rate that reflects the current
market assessments of time value of money and the risks specific to the
asset. Reversal of impairment loss is recognised immediately as income
in the Profit and Loss Account.
M. Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
Notes on Accounts. Contingent Assets are neither recognised nor
disclosed in the financial statements.
N. Miscellaneous Expenditure
Miscellaneous Expenditure is charged to Profit and Loss Account as and
when they are incurred.
Mar 31, 2010
A. Basis of Preparation of Financial Statements:
The financial statements are prepared under the historical cost
convention from the books of accounts maintained on accrual basis, in
conformity with accounting principles generally accepted in India, and
comply with the accounting standards issued by the council of the
Institute of Chartered Accountants of India and Accounting Standard
(Companies Rules), 2006 and referred to in Section 211 (3C) of the
Companies Act, 1956 (the Act).
B. Use of Estimates:
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets, liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Difference
between the actual result and estimates are recognised in the period in
which the results are known / materialised.
C. System of Accounting and Income Recognition:
1. The accounts are prepared under historic cost convention and all
significant items of Income & Expenditure are accounted on accrual
system of accounting.
2. The company recognises income as prescribed by RBI guidelines on
Income Recognition.
3. i) Hire Purchase Income is accounted by sum of digits method to
provide a constant periodic
rate of return on the net investment outstanding in the contracts.
ii) Lease Income is accounted on accrual of lease rentals for the
period.
iii) Income from bills discounting is accounted on due basis.
iv) Brokerage/commission received on insurance agency services has been
accounted on accrual basis on certainty of realisation.
D. Fixed Assets:
Fixed assets are stated at original cost/revalued cost less
depreciation after taking into consideration the Lease adjustment
account where necessary.
E. Depreciation
Depreciation is provided on straight line method at the rates and in
the manner specified in the Schedule XIV to the Companies Act, 1956.
Depreciation on revalued assets to the extent of revaluation is
transferred from revaluation reserve.
F. Investments
i) Long term investments are valued at cost. Provision for diminution
in the value of investments is
made to recognise decline, other than temporary. ii) Current
Investments are stated at cost or market value whichever is lower.
G. Current Assets
i) Stock on hire is valued at agreement values net of recoveries. ii)
Stock of shares is valued at lower of cost or market price.
H. Employee Benefit:
i) The Companys Defined Contribution Plan to provident fund are made
at predetermined rates to the recognised Provident Fund and are
charged to Profit and Loss Account.
ii) Liability for Defined Benefit Plan for Gratuity is provided on the
basis of valuations, as at the Balance Sheet date, carried out by Life
Insurance Corporation of India.
I. Borrowing Costs:
Borrowing costs are recognised as an expense in the year in which they
are incurred except which are directly attributable to
acquisition/construction of fixed asset, till the time such assets are
ready for use, in which case the borrowing costs are capitalised as
part of the cost of asset.
J. Taxes on Income:
i) Tax expenses comprise both current tax and deferred tax at the
applicable enacted or substantively enacted rates. Current tax
represents the amount of Income tax payable/recoverable in respect of
the taxable income/loss for the reporting period. Deferred tax
represents the effect of timing difference between taxable income and
accounting income for the reporting period that originate in one period
and are capable of reversal in one or more subsequent periods. Deferred
Tax Assets are recognized only if there is virtual certainty of
realization.
ii) Fringe Benefit Tax is provided in accordance with provisions of
Section 115WA of the Income Tax Act, 1961 as expenditure for the
period.
K. Earnings per Share
The basic earnings per share is computed by dividing the net profit
after tax for the period by the weighted average number of equity
shares outstanding during the period. Diluted earnings per share, if
any is computed using the weighted average number of equity shares and
dilutive potential equity share outstanding during the period except
when the results would be antidilutive.
L. Impairment:
At each balance sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an assets net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a prediscount rate that reflects the current
market assessments of time value of money and the risks specific to the
asset. Reversal of impairment loss is recognised immediately as income
in the profit and loss account.
M. Provision, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
Notes on Accounts. Contingent Assets are neither recognised nor
disclosed in the financial statements.
N. Miscellaneous Expenditure:
Miscellaneous Expenditure is charged to Profit and Loss Account as and
when they are incurred.
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ICDS Ltd. Key Financial Ratios
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തളരുന്ന രൂപയും കൊഴിയുന്ന വിദേശ നിക്ഷേപവും: നിഫ്റ്റിക്ക് മുന്നേറ്റമോ? ഈ ആഴ്ച സ്വാധീനിക്കുന്ന ഘടകങ്ങൾ
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